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#1 of 58 Death Watch for Kia?
by MrShift@Edmunds HOST
Jul 10, 2010 (4:47 pm)
KIA is looking more and more like the next brand to go belly-up in the American market.
With very stiff competition from sister Hyundai, and with GM and Chrysler dealers folding (thus ending multi-brand outlets), KIA will probably not be able to sell enough cars to stay in business here.
What ails this brand? Is the entry level market just too cheap for most buyers these days?
What could KIA change before it's too late?
Jul 10, 2010 (6:26 pm)
Are you possibly making up your own news story? Everything I've seen shows they're growing and more successful than any time in their history.
“I am encouraged to see sales of Kia vehicles around the world surpass the 1 million unit sales mark faster than ever before in the automaker’s history. All of major regions are now gearing up for the sales of all-new Sportage crossover, which will certainly add to our momentum and help continue strong sales for the brand in the second half of 2010,” said Hyoung-Keun Lee, President of Kia Motors.
#3 of 58 Re: Death Watch for Kia? [Mr_Shiftright]
Jul 10, 2010 (6:42 pm)
I hope not. IMO Kia has some of the better styling of the HyunKia group, and I don't know if it is really suffering right now - I see an adequate amount Souls and Fortes around. If anything, if the group gets ambitious, maybe Kia will become lowline to lower middle and H will be everything above.
#4 of 58 Wall St. Journal article
Jul 10, 2010 (6:46 pm)
The Wall St. Journal included KIA among brands that would disappear by the end of 2011.
Their argument was that Hyundai could not afford multiple brands and would shed KIA like GM did Pontiac and Saturn. It was an unconvincing article for me - GM sales were plummeting while Hyundai/KIA sales are increasing; KIA keeps coming out with new models while the multiple GM brands were stagnant. Most of the brands that they said would disappear were in dire financial trouble, but KIA is not, as far as I can tell. As I said, it was a rather weak argument, but it may be the source of some rumors.
Jul 10, 2010 (6:52 pm)
Maybe not so good in the U.S., which was the subject of my post---that they might go belly up in the US market. I wasn't referring to the world market. Kia sells cars at very little profit after all, in the USA market, and the parent company Hyundai might get tired of competing with itself, given the small market shares here.
Sales percentages don't tell the whole story.
Consider that BMW has the same market share as KIA and sells each unit at a considerably higher profit. It's hard to make money selling $11,000 cars is what I mean.
Seems like KIA goes boom and bust within its own products---it has one hit, and right next to it, a real bomb.
I'm just not sure KIA has the product mix, reputation, price point, dealer network, marketing, etc, to convince Hyundai to keep going.
A lot depends on the economy I think. One or two more years of recession and I see Hyundai throwing in the towel in the US with KIA.
#6 of 58 What about Suzuki?
Jul 11, 2010 (6:21 am)
I believe Hyundai would almost be forced to keep the Kia name going in other markets if what we read about the Korean position when Kia went bankrupt and Hyundai was almost forced to buy them is correct. But looking at the market sales I would think Suzuki would be the one on the chopping block. It also looks like the Smart car has continued its failing ways in the US market pretty much like it did over seas.
While I am not a big Kia fan it has a better looking outlook than Suzuki in sales I think.
#7 of 58 Re: What about Suzuki? [boaz47]
by MrShift@Edmunds HOST
Jul 11, 2010 (6:51 am)
Oh yeah well Suzuki is a foregone conclusion, and Smart hasn't *ever* made money.
Tesla is another one circling the drain.
But it's interesting to speculate on the "bigger fish" and how and why *they* fail. I think some people were surprised that Pontiac tanked so fast, since you see Pontiacs everywhere---but in terms of making sense in the market, the car didn't anymore.
I just don't think KIA makes sense anymore in the US market, for the parent company I mean.
Kia is like Radio Shack to Hyundai's Best Buy.
#8 of 58 According to their CEO...
Jul 11, 2010 (3:59 pm)
and I believe it was their Japanese automotive CEO speaking, Mitsubishi has no intentions of pulling out of the American sales market. With the new all-electric i-MiEV coming out soon I would not expect Mitsubishi to pull up stakes. The Outlander SUV and Lancer compact are still selling the best and I drive a 2008 Lancer GTS and love it, but to someone looking at their sales performance of the past several years I would be strongly suspecting their departure, too.
Don't think that's gonna be happenin', though.
Jul 11, 2010 (9:09 pm)
is like the #1 supplier of rental cars in the U.S. now, although with GM's ENORMOUS resurgence in the no-profit fleet sales world last month, Kia might have a little competition there once again.
Seems like Hyundai would be smart to keep Kia here, sopping up the fleet sales, to protect and improve the value of the Hyundai brand, especially with the new push into luxury cars for Hyundai.
I dunno...my local Toyota dealer just bought a Kia franchise about 3 months ago and so far hasn't been able to move any of the cars in the initial shipment off the lot. I think some of the Kia models have potential, but just like Mitsubishi and Suzuki, two other companies that will definitely be gone from American shores in the next few years (while continuing to thrive in Japan, I have no doubt), even the company's brand new models have nothing at all to make them stand out from the crowd. The ONLY unique thing they have at Kia is the Soul, and even that has competition from the Cube, neither of which seems to sell well at all despite their curiosity value. And neither gets more than mediocre reviews as a driver's car, although they certainly are eccentric and different styling-wise.
#10 of 58 Re: Kia [nippononly]
Jul 17, 2010 (9:29 am)
Yeah, my local Toyota/Scion stealer bought a Kia francise too and I have seen the same thing week after week with Kia, the same vehicles just sitting there. Seem to have big difficulties getting the cars off the lot.
Not sure what is going to happen to Kia but I can tell you sopping up fleet sales is not going to protect and improve the value of the Hyundai brand. At least, they don't have as high fleet sales as GM, Ford, and Chrysler do.